Dow Advances on Apple-Infused Rally Amid Signs of Growing iPhone 12 Demand By Investing.com


© Reuters.

By Yasin Ebrahim

Investing.com – Wall Street moved higher Friday, as an Apple-infused rally in tech and positive earnings helped offset weakness in energy as oil prices fell.

The rose 0.55%, or  151 points. The rose 0.18%, while the gained 0.19%. 

Apple (NASDAQ:) surged 3% to offset losses in other big tech names such as Microsoft (NASDAQ:), Facebook (NASDAQ:), and Amazon.com (NASDAQ:) as investors digested signs of higher demand forecasts for the tech giant’s upcoming slate of new 5G- enabled iPhones.

“Our recent Asia supply chain checks conducted by our TMT team show a discernible uptick in forecasts for iPhone 12, which bodes well for demand trends heading into this highly anticipated October launch,” Wedbush said in a note.

Energy, however, proved an exception to the move higher as oil prices slipped on concerns that a slower pace of economic recovery could hurt demand.

But not every sector of the economy is flagging a potential slowdown. Housing remains robust, while a survey on business activity also surprised to the upside.

The Commerce Department said existing home sales in July to a seasonally adjusted annual rate of units., topping forecasts for a 14.7% rise.

“Given the continued plunge in mortgage rates, there is probably further upside for demand in August,” Jefferies (NYSE:) said.

IHS Markit data showed flash Composite Purchasing Managers’ index of 54.7 for August, above forecasts of 51.3.

Upbeat quarterly corporate earnings also supported investor sentiment on stocks.

Deere  (NYSE:) advanced more than 5% after the company reported fiscal third-quarter results that beat on both the top and bottom lines.

Foot Locker (NYSE:) also delivered quarterly results for the second quarter that topped analysts’ consensus, sending its share price up 1%

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Wall Street Opens Mixed as Rally Runs out of Steam By Investing.com


© Reuters.

By Geoffrey Smith 

Investing.com — U.S. stock markets opened mixed on Friday, paring premarket losses but unable to find the strength to advance further after a record-breaking week. 

By 9:35 AM ET (1335 GMT), the was down 12 points or less than 0.1% at 27,650 points. The , which had set its first new record high since February earlier in the week and the , which posted the latest of its 35 new record high closes this week, were both down by similar amounts. 

Such data as were published Friday were mildly supportive, with IHS Markit’s PMIs for the and sectors both coming in ahead of expectations for August. Existing home sales data for August are due at 10 AM ET.

There was little to get excited about on a slow summer news day – with a few exceptions. Solid earnings from agricultural machinery maker Deere (NYSE:) & Co., often seen as a proxy for the health of the farming sector, sent the stock up 4.7% to a new all-time high. Tesla (NASDAQ:) stock, meanwhile, cracked the $2,000 level for the first time ever ahead of its stock split. As with Apple (NASDAQ:)’s $2 trillion valuation posted earlier in the week, the number is of little significance beyond the fact that it’s a nice round number.

Amazon (NASDAQ:) stock fell 0.5% after news that its consumer head Jeff Wilke is to retire.

The biggest immediate threat to stocks – from rising bond yields – has petered out in the second half of the week, with the yield on the Treasury note falling to 0.64% from a high of 0.72% a week ago. However, the negative tone from other markets – lost over 2% in early trading on worries about global demand – kept a cap on risk appetite.

The miserly yields on offer from bonds are one factor likely to support the stock market even if there is a new setback to the economy, argued Robeco portfolio manager Jeroen Blokland in a weekly blog post. 

“Valuation is a relative concept,” Blokland said. “Government bonds, for example, are currently a lot more expensive” than equities.

He noted, however, that there is “no shortage of catalysts” on the horizon that could change market sentiment.

“The low-hanging fruit in the recovery has been harvested, labor markets remain weak and the run-up to U.S. elections may also lead to greater volatility on equity markets,” Blokland argued. “That’s why we prefer to huddle fairly close to the exit; to ensure that when sentiment turns, and valuation is used as a stick to beat the dog, we are not trampled underfoot by other investors who are also all charging for the door at the same time.”

 

 

 

 

 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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European shares weaken after Wall Street rally as growth worries persist By Reuters


© Reuters. The German share price index DAX graph is pictured at the stock exchange in Frankfurt

(Reuters) – European stocks slipped on Wednesday, failing to draw strength from a record run for Wall Street’s S&P 500, as investors feared a resurgence in coronavirus cases could dent a nascent economic recovery in the continent.

The pan-European STOXX 600 index () was down 0.1% by 0715 GMT, with utilities (), mining () and oil and gas () leading losses.

BP (L:), Total (PE:) and Royal Dutch Shell (L:) were down between 0.4% and 1% as crude prices slid on concerns about U.S. fuel demand. [O/R]

Trillions in dollars of stimulus and a rally in technology stocks helped the S&P 500 confirm a bull market on Tuesday, but doubts over the strength of a global recovery from the health crisis limited gains across other markets. [GLOB/MKTS]

Several countries in Europe imposed fresh travel curbs due to a pick-up in coronavirus cases.

German utility group RWE (DE:) fell 5.2% as it launched a share issue to finance its purchase of wind turbine maker Nordex ‘s (DE:) project development pipeline.

Shipping group Maersk (CO:) jumped 5.6% as it reinstated full-year earnings guidance above its previous forecast.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.





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Tech-fuelled ‘everything’s awesome’ rally looks unstoppable By Reuters


4/4
© Reuters. Apple logo is seen on the Apple store at The Marche Saint Germain in Paris

2/4

By Saikat Chatterjee and Thyagaraju Adinarayan

LONDON (Reuters) – Today’s $72 trillion question for investors: To buy or not to buy into the global equities rally? Notwithstanding inflated share prices, politics and the pandemic, the answer from many is a resounding “yes.”

That’s not just because unprecedented stimulus – $20 trillion and counting – is forcing a structural change in how financial assets are valued.

It’s also down to years of societal shifts, innovation and now, the pandemic, which could transform forever the way people work, study and shop – playing into the dominant hand of tech stocks.

So while renewed coronavirus outbreaks and looming U.S. elections have made some investors cautious, many equity bulls are hanging in there, having already boosted the value of stocks globally by $24 trillion since end-March.

As global equities near record highs, strategists say the quickfire bear-to-bull switch was not only justified but deserves to go further.

“The COVID pandemic has taken existing trends – greater dependency on tech, online shopping, remote working, etc. – and supercharged them,” said Benjamin Jones, a senior multi-asset strategist at State Street (NYSE:) Global Markets.

With technology stocks holding on to their eye-popping gains, investors say the next leg of the rally is likely to come from value stocks – so called because they trade at cheaper valuations than their growth-oriented peers.

Stocks are benefiting of course from above-average equity-risk premiums, the return one can earn by holding stocks compared with risk-free assets. Global stocks carry an ERP of 4.6%, while for U.S. stocks, it’s at 4%.

That might erode over time, but for now interest rates appear firmly stapled to the floor.

As for valuations, they are hovering near 22 times forward earnings for the U.S. S&P 500 index (), the highest since the dotcom bubble in early 2000. But then, the index too has changed dramatically with technology by far its biggest sector component.

Making up around a third of the benchmark index, they are the ultimate pandemic stay-at-home beneficiaries, especially those known as FANGMAN – an expanded tech group comprising Facebook (O:), Apple (O:), Netflix (O:), Google (O:), Microsoft (O:), Amazon (O:) and chipmaker Nvidia (O:).

Their multiples of 80-100 times forward earnings have led the broader market higher.

Until a few decades ago, bank, oil & gas, and industrial stocks made up a bulk of the S&P 500. These sectors typically trade at lower multiples, given commodity price volatility and high capex needs – a major reason behind this year’s underperformance of benchmark.

“What’s odd about the market debate is that it’s set up as follows: look at the S&P 500 and the response is the equity market is expensive. Then you ask people what they like and they favour a lot of the secular-growth, high-multiple stocks,” said Morgan Stanley (NYSE:) chief cross-asset strategist Andrew Sheets.

A ratio of U.S. stocks on a market weighted basis to an equally weighted index of shares is at its highest levels since the 2008 crisis, indicating the dominance of the handful of large tech stocks in the market.

For a graphic on Put call ratio: https://fingfx.thomsonreuters.com/gfx/mkt/yzdvxnbngvx/Put%20call%20ratio.JPG

The valuations make all the more sense because of the lower for longer interest rate environment, said Maximilian Kunkel, CIO of Global Family Offices at UBS.

“As a result we remain constructive on risk assets even after the rally.”

Many others would seem to agree. On derivative markets, the put-to-call ratio for U.S. stocks, a measure of positioning sentiment, is the lowest since 2010. The ratio is inversely related to equity performance.

Some caution is although warranted, given that asset classes of all stripes have gained. A portfolio with a 25% split in stocks, bonds, cash and gold would have earned a record 18% in the last 90 days, BofA analysts calculate.

But the edifice is vulnerable to a rise in inflation, many argue, with investors’ holdings of yield-sensitive investments up $8.1 trillion over 18 months, according to Morgan Stanley.

Though prices have rebounded from deflationary territory fairly quickly, inflation remains far below central bank estimates, indicating equity valuations will remain attractive.

Latest flows data shows investors are switching from cash to equities.

“I would still say investors are underweight equities and that provides a fairly decent backdrop for risk assets to rally,” said Jason Borbora-Sheen, portfolio manager at Ninety One Asset Management.

For a graphic on SP500 vs. US high yield yields: https://fingfx.thomsonreuters.com/gfx/mkt/jznpnkakovl/SP500%20vs%20US%20high%20yield%20yields.JPG

For a graphic on U.S. market performance: https://fingfx.thomsonreuters.com/gfx/mkt/nmovalalbpa/US%20market%20performance.JPG





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Stocks in Europe rally on hopes over U.S. stimulus, virus trends


A member of staff wearing a protective face mask at the Holiday Inn Whitechapel hotel, operated by InterContinental Hotels Group Plc (IHG), cleans a perspex screen ahead of the hotel’s reopening for general bookings in London, U.K., on Friday, July 3, 2020.


Chris Ratcliffe/Bloomberg News

European stocks rallied on Tuesday, taking heart from signs of slowing spread of the coronavirus and the possibility that a new round of U.S. stimulus will get enacted.

Up 0.3% on Monday, the Stoxx Europe 600
SXXP,
+1.64%

rose 1.7%.

Travel and leisure plays led the rise, with gainers including International Airlines Group
IAG,
+4.76%
,
cruise operator Carnival
CCL,
+5.16%

and InterContinental Hotels
IHG,
+2.99%
,
which reported a loss and said it wouldn’t pay a dividend.

Automakers BMW
BMW3,
+4.32%
,
Volkswagen
VOW3,
+3.36%

and Daimler
DAI,
+2.88%

each registered strong gains, fueling gains for the German DAX
DAX,
+2.06%
.
The French CAC 40
PX1,
+2.00%

and U.K. FTSE 100
UKX,
+1.65%

also jumped.

After the 356-point gain for the Dow industrials
DJIA,
+1.30%
,
futures
YM00,
+0.67%

were pointing to further gains on Tuesday.

The coronavirus picture in the U.S. seems to be improving. According to The New York Times tracker, new cases have fallen 18% over the last 14 days and new deaths have dropped 6%.

The gains in markets comes amid signs the executive order President Donald Trump signed to extend jobless benefits won’t actually reach the hands of unemployed Americans. The extra $400 per week Trump’s order provides is contingent on states paying $100, and New York State Gov. Andrew Cuomo said no one in his state would receive the extra $400. But officials in the White House and Congress say they’re open to resuming talks on a stimulus package.

“The clouds of uncertainly are starting to part, and a ray of optimism is breaking through that additions to the U.S. stimulus package are looking more promising as both sides are set to rejoin the negotiating table,” said Stephen Innes, chief global markets strategist at AxiCorp.

The latest labor market data showed the U.K. unemployment rate stayed flat at 3.9% in the three months to June, reflecting people not seeking jobs as well as 7.5 million who are either furloughed or temporarily away their job.

Of companies in the spotlight, HelloFresh
HFG,
+3.28%

gained 2% as the German prepared food kit maker raised its financial guidance for the third time this year. The stock has soared 163% this year.



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